It is interesting that, when FE Week approached a number of private equity firms for comment on the document, including Montagu Private Equity, which took over the College of Law in 2012—it had previously been a charitable institution—Sovereign Capital, Silverfleet Capital and LDC, none wanted to comment. Hon. Members can read what they like into that, but it says to me that these issues have not gone away, and the fact that there is nothing in the Bill to strengthen those procedures is worrying.
Just in passing—actually, no; it is a very important point—Unison observed in the email I previously referred to that in the insolvency procedures there are lots of provisions for the protection of students, but no mention, as far as it can see, for the protection of staff. It also asks an open question that the Minister may want to try to answer: are we to assume that people will be made redundant, or that in those circumstances they would be TUPE-ed to a different provider? That would not be a long-term guarantee in the way I previously discussed.
Too often in the past, stable doors on problems in the FE sector have been closed after the horses have bolted—horses that have lost the public purse tens of millions of pounds and caused problems and sometimes personal disasters for some of those working or studying in colleges. We believe that there needs to be firm and robust provision in the Bill to limit the opportunity for some of those private providers to get rich quick without taking any account of the publically inherited assets.
For the avoidance of doubt—I want the Minister to be clear about this—we are not saying that we would oppose any private sector takeover of a college in those circumstances. We are saying that the education administrator will have to make a judgment as to whether that should be a bid of last resort. Whatever the circumstances, the fact that those colleges have had substantial sums of money in the past must be taken into account. Assessments must be done properly, and if the education administrator cannot guarantee that the assets of any FE body transferred to a private company are less than half of the funding of the acquisition of the assets, he may not transfer them.
That 50% figure is probing. It is not necessarily one that we would stick with, but the minimum we would like to see from the Minister is an assurance that that basic principle that the education administrator may not transfer the assets of any FE body to a private company when more than half of the funding to acquire the assets came from public funds should be placed in the Bill in some shape or form. If it is not, we do not believe—nor do others—that the Bill safeguards us from a repeat of some of the things that happened in 2012.
Without taking us outside the scope of the amendment, the cloudiness of some arrangements in the private sector using public funding are not unique to this country. They have also seen in other countries with FE-type institutions, notably Australia and the United States, and they are issues on which Baroness Wolf has waxed lyrical in concern and criticism.
I want to leave the Minister in no doubt that the point we are making is based on what has happened in the past. There is an old saying, “once bitten, twice shy,” and in this instance we should be very shy of allowing private providers simply to come in and acquire a significant amount of publicly acquired assets in a case of insolvency without us looking carefully and extracting some price in return.

Robert Halfon: I thank the Opposition for the amendment and the hon. Member for Luton North for his contribution. I will make a couple of general points before I go on to the specifics.
As has been observed, and I repeat, without the Bill there is no protection for students or from the seizure of college assets. The hon. Gentleman talked about hundreds of millions in Government funding, but the general point is that college insolvency is likely to be a very rare event, so the portion of government assets that might transfer to a private sector company is likely to be small. The priority, as I say, has to be protecting students. Such a transfer is right if the education administrator is fulfilling his special objective and believes that it protects the students if he has the ability to do so.
On solvent dissolution, assets must go to a charity that has educational purposes. In insolvency in a special administrative regime, transfers go to bodies prescribed in regulations, all educational, which can include private education providers, or, as the hon. Gentlemen will be pleased to know, local authorities. As the FE Minister, I always have colleagues coming to me with suggestions about how the local authority might be involved with the FE college.
The Bill is not about private providers; it is about statutory bodies and companies that run designated FE institutions—that is, designated by the Secretary of State. For independent training providers offering provision to those with advanced learner loans, there must be a register of training organisations, they must have at least satisfactory financial health, they must pass capacity and capability requirements, and they have to have evidence of and a track record in education and skills delivery.
To go back to the question asked by the hon. Member for Batley and Spen, transfer schemes are a feature of other special administrative regimes. They allow for assets to be transferred to another body without the agreement of a third party which would otherwise be necessary—for example, leases without the consent of the landlord. That means that the scheme can be used to prevent a third party from blocking a transfer that is intended to facilitate the achievement of the special objective. The special administration regime’s delivery  of the public policy objective—in this case the protection of students—should not be subject to third-party agreement. The education administrator will use a transfer scheme only if that is necessary to achieve the special objective.
It is important to note that the Secretary of State must approve any such scheme before it is used. Even if the education administrator does not use a transfer scheme, it is open to the Secretary of State to challenge the administrator if he or she feels that the administrator is not performing his or her duty to protect students.

Kelvin Hopkins: As a member of a local authority many years ago, I saw the representatives of a town shopping centre—an asset that was owned by the council but rented on a long-term basis—who were skilled financial advisers run rings around the local authority treasurers, who just could not cope with the power ranged against them. We have to be very careful, because when big money is involved, companies will get the best brains to ensure they win.

Robert Halfon: I thank the hon. Member for Luton North for the new clauses and for his wise contributions throughout the Committee. Rather than the role of banker, I think he has taken on the role of the Gandalf of the technical education and further education sector. There will be therefore be no danger of his passing as the hon. Member for Blackpool South described.
The hon. Member for Luton North has tabled two important new clauses. In an ideal world it would be a good thing if all or even some members of governing bodies had important financial qualifications, but I remind him that the head of Blackpool and The Fylde College, when asked about that, said:
“I am thinking of the unintended consequences. It is very easy to say that we can dictate exactly the constitution of a governing body, but if we are looking at further education corporations across the country, some of them are very different. My own, for example, is an outstanding college.”—
I have seen it for myself, and it certainly is—
“We are very strong financially…we benefit from the mix and balance that we have on the board: we benefit from our business community and from two very able students on the board. I am hesitant about mandating exactly what that board would look like, because it varies by college. If, for example, I were a land-based college, I might want a slightly different mix, so I am hesitant about fully supporting that.”––[Official Report, Technical and Further Education Public Bill Committee, 22 November 2016; c. 60, Q80.]
When I asked her about the best way to achieve what she had done, she said what is needed is an expert to manage finances: not necessarily, dare I say it, someone with an educational background—we were talking about the education administrator earlier—but someone with a good understanding of finances. Where colleges are doing better even with all the financial pressures, I suspect that is because they have brilliant financial teams as well as the brilliant leadership of the principals and the advice of the governing body.
It is the governing body of the college that is best placed to ensure that effective management is in place that meets the needs of the college, but it must be the principal who puts her team in who has the day-to-day responsibilities. When colleges fail, as the hon. Gentleman will know, the proper intervention system is in place, with the education commissioner and suchlike.
The introduction of the insolvency regime will change a lot of this anyway, and it will serve to emphasise the importance of sound financial management. Although the Government are committed to the protection of learners, corporations are ultimately responsible for ensuring the financial health of their institutions.
I am wary of imposing such a measure, but I have a lot of genuine sympathy with the hon. Gentleman’s intentions. I commit to continue working with the sector to strengthen the financial acumen of governing bodies and the capability of financial directors. That will protect the interests of not only the colleges, learners and employers in the local communities but the taxpayer, which is incredibly important. On that basis, I hope the hon. Gentleman will withdraw the motion.